Chief Justice Warren E. Burger: Magnesium Casting Company against the National Labor Relations Board, Mr. Chandler I think you were still at work when we recessed.

Mr. Louis Chandler: Mr. Chief Justice and may it please the Court.

With reference to the question posed by Mr. Justice White, I would like quote Judge Coffman in the Pepsi Cola decision as to the requirements the Court’s consideration of the record and the board’s findings under Section 10.

He states in an unfair practice proceeding, the board cannot completely advocate its responsibility to a regional director a functionary whose appointment is not even subject to consideration by the Senate as are those of board members.

Moreover the board’s experience is particularly relevant and desirable in deciding complex issues relating to the appropriate bargaining unit before the potent sanctions arising from the finding of an unfair labor practice are invoked.

Where the choices between two fairly conflicting views, the Court must defer to the board’s decision.

But here, the board has not actually considered the questions of fact in law.

The board has merely rubber-stamped his decision and thus the regional director’s decision was perpetuated even though it may have been in fact wrong and we too would be blindly endorsing the question about result.

Such difference to the regional director was not intended by Congress, it decided that the board itself must grow whether a litigant has committed an unfair labor practice, we see no basis for thus mutilating the legislative scheme.

And Judge Butzner and the claimant wife said in a case that also involved the use of summary judgment that the use of summary judgment in deciding whether an employer had committed an unfair labor practice does not exempt the board from complying with the Administrative Procedure Act.

And the board’s earlier consideration of the company’s request for review of the regional director’s decision, does not supply the deficiency.

For them, the board as in the Magnesium case simply denied the request – that was my interpolation simply denied the request with the observation that it raised no substantial issues, warrants and review.

The board is charged with a duty of stating the reasons why the board concluded the facts that showed a violation of law.

No statutory exception to this rule exist because critical elements of the controversy were determined preliminarily by the regional director and the representation proceedings.

The board, not the regional director has the responsibility of deciding complaints --

Chief Justice Warren E. Burger: How much of your case Mr. Chandler depends upon the examination by this Court of your newly discovered evidence claim in its context --

Mr. Louis Chandler: I think the substantial portion of it would, because the regional director based his decision substantially upon the evidence testimony given by the witness who subsequently stated, admitted.

Chief Justice Warren E. Burger: Would you agree that it would ordinarily take it very strong showing on an issue of that kind that is rejection of the newly discovered evidence claimed to engage the attention of this Court?

Mr. Louis Chandler: I think the fact that he admitted that he had withheld information at the hearing before the regional director would be that kind of strong evidence sir.

Justice Harry A. Blackmun: Mr. Chandler let me bring you back to the question I asked as we closed last night, I didn’t sense an answer to it in the material which you read at the length just now.

Is it your position that when the board does not formally review the regional director’s determination, that review is forever lost in the Court of Appeals for example?

Mr. Louis Chandler: Yes, in this sense Mr. Justice Blackmun.

The review must under Section 10 (e) as it reads and as I interpreted include a review of the board findings as well as making a determination based upon substantial evidence on the record.

And the board findings are as set forth as required in Section 10 (c) requiring the preponderance of the evidence that be used by the board in making its determination so that they must be read together and in an analysis by the Bureau of National Affairs made on the Administrative Procedure Act in 1946, they have a specific reference to the exceptions to the APA under a comment in Section 5 which talks about the division of fall as between the functionaries like the regional director and board members even on the exceptions and one exception if you recall was that relating to the certification of employee representatives.

And then the analysis the BNA says with respect to the accepted matters.

The Senate Judiciary Committee emphasizes that administrative agency should not apply the exemption to such cases as tend to be accusatory in form and involved sharply controverted factual issues since the prescribed exceptions are not to be interpreted as precluding the statutory procedure under APA where it is required.

And I submit sir that the Congress did not intend the delays inherent in the board’s refusal independently to review the evidence in an unfair labor practice case so that the boards would feel -- the board would feel -- the parties rather would feel compelled to take the cases to a Circuit Court to secure their first review of all the evidence presented at the regional director level or being on a substantial rather than the preponderance of evidence test as the statute provides.

Justice Harry A. Blackmun: My question I come back to, what is directed to whether the issue is reviewable in the Court of Appeals.

Mr. Louis Chandler: Not on the basis that the law provided for, Congress provided that a preponderance of evidence test first be applied by the board.

That’s in Section 10 (c).

The Court reviews it on the basis of substantial evidence and then not reviewing the board’s finding so that the parties I submit are being deprived of their rights under the act.

And also of course under the provisions of the Administrative Procedure Act and Judge Coffman in relying --

Justice Byron R. White: Did the lower courts review the regional director's interpretation in terms of a substantial evidence.

Mr. Louis Chandler: Yes I do that, I agree that they were reviewed.

Justice Byron R. White: The Court did expressly at this case.

Mr. Louis Chandler: Expressly and this is what I quarrel with because when Judge Coffman states that a difficult question was involved and that he was relying on the expertise of the regional director which is set forth in record appendix page 205 and states at the last page of his decision that perhaps the board ruled or determined in its own mind that it was not a difficult question.

I don’t believe that party should have to rely on the judge’s speculation as to the reason for the board’s action.

Chief Justice Warren E. Burger: Was his statement that he was relying on the expertise of the regional director?

Mr. Louis Chandler: On page 205 of the record appendix, he so indicated because there was no expertise of the board involved based upon all of the evidence because they refused to look at the evidence and that Pittsburgh Plate Glass which is the only case upon which the board relies was decided 1941 and in that case the board made its own findings on the representation case after the board members reviewed the evidence and it was decided five years before the enactment of the Administrative Procedure Act.

And as a matter of fact, in 1961, the board attempted by the means of the reorganization plan number five to get permission to delegate unfair labor practice cases.

And Congress rejected this proposal and the board should not now be permitted to accomplish administratively what it could not persuade Congress to do.

The desire to expedite does not give the board the right to legislate from the sense a waiver rights of the parties or to refuse to consider pertinent and vital newly discovered evidence.

The board so called rule against litigation when applied in this manner is directly contrary to Section 10 (c) of the Act and a violation of the Administrative Procedure Act.

I would like to call this honorable court’s attention to the case of Electronic Alloys in 183 NLRB 14, which was also an unfair labor practice case that arose from refusal to bargain after the board refused to review the regional director’s decision on an appropriate unit.

And the board stated in that unfair labor practice case on a motion for summary judgment in the respondent’s response to the notice to show cause.

The respondent contends that the board has never independently reviewed the record to determine whether the regional director was correct in concluding that the unit is appropriate for collective bargaining purposes.

We have examined the decision and direction of election in that case, we have made an independent review of the record in that case and hold that the regional director’s findings and conclusions are correct.

There's a footnote and they point to some findings that they disagree with, that do not affect the correctness of its ultimate conclusion that there is an appropriate unit and say accordingly as now all issues have been fully litigated and no newly discovered or previously unavailable evidence is offered, no further hearing is required and we shall therefore grant the general counsel’s motion for summary judgment.

The board thus acknowledges that while the review of a regional director’s decision in a representation case maybe discretionary.

Independent board review is required, should the representation case ripen into an unfair labor practice case and the petitioner here is entitled for no less if the law was to be administered fairly and without discrimination and the petitioner respectfully urges that the enforcement decree be vacated.

Thank you very much.

Chief Justice Warren E. Burger: Thank you Mr. Chandler.

Mr. Come you may precede.

Argument of Norton J. Come

Mr. Norton J. Come: May it please the Court Mr. Chief Justice.

As this Court is aware, an employer who contests the validity of a representation election conducted under Section 9 of the Act including the unit determination can obtain Court review of that determination only through an unfair labor practice proceeding under Section 10.

That is he can refuse to bargain on the grounds that the certification is invalid, thereby triggering of an unfair labor practice complaint as the board ultimately finds a violation of Section 8 (a) 5, an issues of bargaining order.

He gets review of the bargaining order and of the underlying certification, a record of which is before the Court of Appeals by virtue of Section 9 (d) under Section 10 (e) and (f).

Now, since early Wagner Act days, it has been established that absent newly discovered evidence or other exceptional circumstances, the employer is not entitled to re-litigate in this Section 10 unfair labor practice proceedings.

Any issues which were or could have been litigated and determined in the prior related representation proceeding.

And as this Court explained in the Pittsburgh Plate Glass case in 1941.

This is because the unit proceeding and the complaint on unfair labor practices are really one proceeding and thus a single trial of the representation issue was enough.

Now, until 1959 the issues in a Section 9 representation proceeding as well as those in a Section 9 unfair labor practice proceeding were determined by the board itself.

Now in that year, Congress amended Section 3 (b) to permit the board to delegate to it's regional directors its powers namely the boards powers under Section 9 including the power to determine the unit appropriate for the purposes of collective bargaining provided however that upon the request of an interested person the board, this is Congress's words may review any action of a regional director delegated to him.

Now, pursuant to this authorization, the board has delegated its powers to determine representation issues to its regional directors.

The procedures in brief are as follows.

They’re set for us in more detail in our brief.

When a petitioner's file and with the regional director and of investigation shows that it appears to have merit.

The regional directors sit down for hearing before a hearing officer and the basis of the record developed at the hearing and I might say that in examination of the appendix here shows that there was a very full hearing before the hearing officer with plenty of opportunity on the part of the employer to cross examine the witnesses including Scott on his duties.

After this record is completed, it goes to regional director who determines on the basis of the record, the unit appropriate for purposes of collective bargaining and directs an election or makes other disposition of the matter.

The boards rules further provide that the regional director shall set forth his findings, conclusions and order or direction which he has gone in this case indeed the Court of Appeals found that the regional director’s decision was as full and complete as any that it had ever reviewed were the board itself had written the opinion was a very complete decision by the regional director.

The boards rules provide that the decision of the regional director shall be final unless a request for review is filed with the board.

Then the rules regarding review set forth a number of grounds upon which review maybe granted by the board or the regional director if he thinks that the issue is an important one that should be decided by the board has authority to transfer it forth with to the board.

Now, where he has not done that and he did not do that here, a party after the director has decided the case can obtain review, if he persuades the board that his case falls within one of the four categories that are set forth in the boards rules, that there is a substantial question of law presented that procedural error was committed that there’s been a departure from board policy or/and that what’s involved in this case that the regional director’s decision on a factual issue is clearly erroneous on the record in such error prejudicially affects the rights of a party.

The boards rules further provide that any request for review must be a self contained document enabling the board to rule on the basis of its contents and that would respect the ground to, which is the factual error ground or any other ground were appropriate said request must contain a summary of all evidence or rulings bearing on the issues together with page citations from the transcript in a summary of argument.

And petitioner fully availed itself of its right under this rule to file with the board a very detailed request for review which starts at page 117 on the record and that goes to page 127 of the record, setting forth in very specific detail the respects in which the regional director erred.

What record references as to evidence that he allegedly overlooked with regard to the duties of Scott as well the other two individuals whose status was in question and also a very detailed legal argument as to the applicable legal principles and controlling board decisions that the regional director allegedly overlooked.

The board’s rules further provide that an opposition maybe filed to this request for review and although it’s not reprinted in the record, I find that in examining the original record that the petitioning union also filed a document with the board in opposition to the request for review which again contained a very detailed recital of the record evidence supporting the regional director’s ruling.

The board had these two documents before it as well the decision of the regional director and on the basis of that decided that no issue warranting review was provided in that kind of a situation as the Court of Appeals pointed out in its opinion, it cannot be said that the board in deciding that no issue was presented merely rubberstamped the regional director you had as focus a presentation of the issues as you could possibly have had, had the board review the record de novo.

Justice Byron R. White: Mr. Come, would your case be different if it had been just rubber stamped?

Are you suggesting that it's essential that the board at some point review the regional director?

Mr. Norton J. Come: No, I'm not saying that but I'm just saying that under the procedure that the board has device for implementing the 3 (b) delegation, there is a very real opportunity provided to a party requesting review to text the board’s eye, if there is any glaring error on the part of the regional director.

Justice Potter Stewart: Well, I don’t suppose the board that reviews every case it thinks is decided?

Mr. Norton J. Come: Well, if it satisfies one of the criteria for granting.

Justice Potter Stewart: Well again I’ll ask you, do you think that the error in this case since the board had never looked at a scrap of what was before the --

Mr. Norton J. Come: No, I do not think so because I think 3 (b) permits the board to delegate the authority to the regional director.

However, 3 (b) says that any party -- subject to the right of any party to request the board to review the case so I think that there has to be an opportunity to request the board to --

Justice Potter Stewart: Let's just say that they --

Mr. Norton J. Come: Yes.

Justice Potter Stewart: Your case really doesn’t depend on how much the board to looked at the regional director’s determination, does it?

Mr. Norton J. Come: No, it does not but I just want to --

Justice Potter Stewart: You might be in trouble for getting this case.

Mr. Norton J. Come: Well, I'm not suggesting that there was a de novo or plenary review.

However, I wanted to point out that this petition to review procedure on the other hand is a meaningful.

It's not a mere rubber stamping of the regional director but to get back to the board’s rules.

The board's rules finally provide that denial of a request for review shall constitute an affirmance of the regional director’s action which shall also preclude re-litigating any such issues in any related subsequent on the fair labor of practice proceeding and so that the issue that we really come down to here is whether or not this procedure is valid and authorized by section 3 (b) of the statute or put more specifically whether the board may properly apply the settled principle barring re-litigation and the subsequent related unfair labor practice proceeding of issues determined in the representation proceeding where it has delegated this authority to the regional director and pursuant to the 3 (b) delegation and has declined to review his determination or whether as petitioners contend and as the Second Circuit held in Pepsi Cola, the board is required before facing an unfair labor practice finding on this representation determination of the directors to make a new and de novo full review of the record.

I might say that the Second Circuit itself seems to have backed down substantially from Pepsi Cola in two decisions subsequent to Pepsi Cola which are cited in our brief, Olson Bodies and Bayliss Trucking.

Apparently they are now holding that Pepsi Cola requirement for de novo review applies only to situations where you have as they put it a difficult mixed question of law and fact.

So the substantial amount of substance has been taken out of Pepsi Cola by the Second Circuit itself.

Well, our position is basically that both the language of the Section 3 (b) and its legislative history support the validity of the board’s delegation procedure on its face 3 (b) as I have just outlined to the Court indicates a congressional purpose to endow the regional director with all the powers which the board previously had in a Section 9 proceeding.

Subject to such review as the board might provide.

Now, since the board’s powers in a Section 9 proceeding previously meant that the board -- that you are not entire -- the board was not required to reexamine in the unfair labor practice proceeding issues that were determined in our case.

If you put the regional director in the shoes of the board, it should follow, we submit that there is no right to have a board redetermination of the issue determined by the regional director in the unfair labor practice proceeding absent, newly discovered evidence.

Chief Justice Warren E. Burger: Do you think you on the present case, the action under review passes muster under the bailiffs in the Olson Bodies, cases in the Second Circuit?

Mr. Norton J. Come: I don’t now whether the Second Circuit would regard the type of issue that we have here as being the difficult question of mixed law and fact that would require the board to review the record de novo.

The Court of Appeals in this case had great doubt in knowing how to apply that standard.

What you had in Pepsi Cola was the question as to whether or not certain employees were independent contractors or not.

Mr. Norton J. Come: It is a question quite like the supervisor question and therefore I would be inclined to say that the Second Circuit would regard this case as controlled by Pepsi Cola rather than Bayliss and Olson.

Chief Justice Warren E. Burger: And you would not pass master under Pepsi Cola?

Mr. Norton J. Come: That is my opinion that we probably would not.

Chief Justice Warren E. Burger: I have some difficulty with trying to read these later cases as a modification of the Pepsi Cola case rather than merely a treatment of a different problem, different kind of problem within the framework of Pepsi Cola.

I noticed that judges Lombard and Coffman and Smith, three of them were on all the panels.

Mr. Norton J. Come: Except in Olson.

In Olson you had a different panel.

Judge Smith was the only one in common to the -- who sat on Pepsi Cola.

You act Judge Friendly and --

Chief Justice Warren E. Burger: Judge Smith and Judge Feinberg.

Mr. Norton J. Come: Feinberg -- Judge Friendly and Judge Feinberg who were not on Pepsi Cola and Judge Friendly in his opinion in Olson speaking for himself and Judge Feinberg because Judge Smith especially incurred on that point indicated that he had great misgivings as to validity of Pepsi Cola but then he went on to find Pepsi Cola distinguishable on the ground that the issue there was not as the important or as difficult as the one in Pepsi Cola.

But in any event, our position is that neither the language of the statute nor the legislative history permits or warrants the kind of distinction that the Second Circuit is now growing.

We think that it was Congress's intention to permit the board, to delegate final authority subject to this limited right to review by the board.

Of all representation issues particularly those involving – including those involving determination of an appropriate unit, whether it be a supervisory question or an independent contractor question or a plain clerical question, we had in Olson Bodies.

For the simple reason that the basic congressional objective as is in enacting the 3(b) delegation as is succinctly pointed out by Senator Goldwater in our quotation we have on page 18 of our brief.

He was no the house senate conference committee was to expedite final disposition of cases by the board, by turning over part of its case load to its regional directors for final determination.

And then he goes on to say that they have empowered the regional director to act in all respects as the board itself will act.

Now the --

Justice Potter Stewart: How does the board sweep the child examiner's findings in an unfair labor practice?

Mr. Norton J. Come: In an unfair labor practice case if there are exceptions to the trial examiner's findings, the board will take the case up and review the record itself with respect to those matters that are accepted.

Justice Potter Stewart: Well, what's the standard that the board applies when it does like this?

Mr. Norton J. Come: It would apply the predominance of the evidence standard --

Justice Potter Stewart: Preponderance?

Mr. Norton J. Come: Preponderance.

Justice Potter Stewart: Now, I gather in this case the trial examiners findings included the regional director’s findings to be applied on the representation issues?

Mr. Norton J. Come: Yes.

Justice Potter Stewart: And is this a different -- I suppose, if I gather an exemption was taken to those claim in the trial examiner’s findings to the unfair labor practice.

Now, what’s the standard that the board applies to that exception?

Mr. Norton J. Come: Well, the board did not even regard -- the trial examiner made no findings here he granted that the --

Justice Potter Stewart: Well that’s the corporate --

Mr. Norton J. Come: He granted the motion for summary judgment and since the --

Justice Potter Stewart: When he files his findings in these cases, do they not include the findings in the representation?

Mr. Norton J. Come: Yeah, but the board does not rereview the --

Justice Potter Stewart: That’s what I want to get.

Mr. Norton J. Come: It does not review --

Justice Potter Stewart: So even though they’re in the trial examiner’s findings to this extent that you told us, the application to preponderance to the evidence who does not apply?

Mr. Norton J. Come: That is correct but it would not have applied --

Justice Potter Stewart: Before its 3 (b)?

Mr. Norton J. Come: It would not have applied before its 3 (b).

Justice Potter Stewart: Before 3 (b) of course that was the board that mean it wasn’t?

Mr. Norton J. Come: That is correct.

Justice Potter Stewart: And in that circumstance of course, you wouldn’t expect the board to go back over it again, but I just want to be clear now that they apply the same rule to the regional director’s findings as they used to apply the wrong which is they don’t review them at all.

Mr. Norton J. Come: That is correct.

Justice Potter Stewart: This curiosity that you say the board in reviewing the trial examiner's findings really makes a preponderance for the evidence determination?

Mr. Norton J. Come: Well, it's more than substantial evidence as to the difference between clearly erroneous and preponderance of the evidence I think we could get in to a nice philosophical --

Justice Potter Stewart: But they actually stated themselves that we have the same findings the trial examiner made?

Mr. Norton J. Come: Except with the regard to credibility, they usually will not disturb a trial examiner’s credibility determination.

I might say that in this case there were no credibility issues because the only important issue on which there was a conflict in the evidence as to whether or not Scott had power to discipline an employee.

The regional director assumed the validity, accepted it is true, the companies version that he did on one occasion discipline or threaten to fire this man but found that that even assuming that that were true that one incident was sporadic enough so that it did not overcome the other evidence shelling non supervisory authority.

Now I just want to in closing say one word about this motion to a newly discovered evidence. Now, the respondent could have gotten a hearing at the unfair labor practice case,if in response to the order to show cause, it was able to come forward with evidence that was in fact newly discovered.

Now, obviously in view of the --

Justice Potter Stewart: Stop right there Mr. Come, if they had come before --

Mr. Norton J. Come: Yes.

Justice Potter Stewart: Then there would have been a predetermination for instance by the trial examiner of representation case?

Mr. Norton J. Come: Had they come forward with newly discovered evidence, the trial examiner would have held a hearing with respect to the issue that was newly discovered and in the light of that evidence he would have reconsidered the regional director’s determination and then it would have gone up to the board.

However, what happened here was that petitioner’s request or claim of newly discovered evidence was a bare naked allegation that Scott had allegedly withheld information as to his full supervisory duties with no indication whatsoever as to what it was that he withheld and then as the trial examiner found and as petitioner’s offer of proof shows which is in the record.

Petitioner when it listed what it was going to show at this hearing list ticked off factors as to Scott’s power to discipline as his power to recommend raises and so on, a list of ten items, all of which had been gone in to very thoroughly in the representation case and which was subject to cross examination by petitioner.

So the trial examiner found that in those circumstances the claim -- that there was newly discovered evidence here was merely a sham in that effort to attempt to re-litigate the very same issues that had been gone into extensively in the representation case.

And the Court of Appeals sustained that finding.

So we submit that in those circumstances there are certainly no substantial issue that merits attention by this Court on the question of whether there was newly discovered evidence that would have warrant a hearing in this case.

Chief Justice Warren E. Burger: Were you suggesting that this case then does not present the issue of the conflict between and among the circuits, Pepsi Cola viz-a-viz the other cases?

Mr. Norton J. Come: No, I'm not Your Honor, I'm merely suggesting that the conflict has been muted somewhat by the Second Circuit subsequent decisions in -- subsequent to Pepsi Cola but I think on the type of issue that we have here, we still have that conflict.

And I submit that the view of the First Circuit which has been adopted by the Tenth Circuit is the correct one and the one that is most consonant with the Congress's objective in enacting the Amendment to 3 (b) because the practical point of the matter is I think as Mr. Justice White pointed out yesterday.

If you are going to require the board when a representation determination ends up in a unfair labor practice proceeding and potentially any certification case can do that because that’s the only way the employer can get review.

To review the record fully at that stage, you are not making the regional director’s determination final as Congress intended to do subject to merely discretionary review by the board and you are robbing the – R case delegation of the time saving that Congress intended to get from permitting the board to do that because whatever time you say that the – R case stage is going to be dissipated at the C case stage and we have statistics in our brief which show that it's rather dramatic that under the R case delegation and when the regional director is permitted to decide these things himself, the time from filing of a petition to direction of election is in the neighborhood of 48 days where as if it goes to the board, it’s about 245 days.

And he would just be substantially sapping the R case delegation of the value that Congress sought to achieve and if it is not necessary, we submit to protect the fundamental rights of respondents to board proceedings as is amply shown by the record in this case.